Financing in Cleveland>Question Details

Jaime Alderm…,  in Cleveland, TN

i have an investor with excellent credit but no money down....what are his options? I cant seem to be able to obtain financing for him.

Asked by Jaime Alderman, Cleveland, TN Fri Dec 18, 2009

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Your investor needs to find a Private Lender. Check out "Private Lending Made Easy" by Alan Cowgil. I am a Realtor and an investor and I use Private Lenders all the time. The second option is to ask the Seller to carry some paper. Research Seller financing on Google or Yahoo.

Joe Herbert
1 vote Thank Flag Link Fri Dec 18, 2009
I apologize for being so blunt and I am sorry to say (and I say this with confidence), but you are wasting your time with this client. Unless he finds a family member or friend that will lend him money, he will not get a mortgage with no money down on an investment property-not from a bank and not from a hard money lender.

I get referrals from Realtors all the time for investment properties with little or no money down. I've gone through this many times.There is nothing out there for them from any lending institution.

Investors with no money down are of the bigger culprits for the situation we are in.

Even hard money lenders would want a sizable amount of "skin in the game" before the do such a loan
2 votes Thank Flag Link Fri Dec 18, 2009
Can you email me? I have a few options.
Web Reference: http://www.jsgwm.webs.com
1 vote Thank Flag Link Wed Dec 23, 2009
My only suggestion for a customer like this would have him start his "investing" by purchasing a 2-4 unit property as his owner-occupied property with an FHA loan. He then can at the very least get a low down payment loan (3.5% down) and have a valid product that allows for rental income. After he gains enough equity in the property, have him refinance it into a conventional loan and then buy his next property as FHA again. I know that the state of Tennessee has some programs right now which give grant monies to help purchase property. Maybe he could qualify for such as well.

I hope that helps.
Luke Allison
1 vote Thank Flag Link Fri Dec 18, 2009
Jamie,

After reading the other post on your investor, the only other chance they may have is if they have other sources to use that they may not have thought about, such as an IRA. Not all IRA's can be used to purchase real estate. They would have to check with whoever is handling their IRA to see if it can be used, if not then they could think about moving it to one that will work. Other than that he is out until he can come up with his share.

Denise Bivens,e-PRO
Web Reference: http://www.DeniseBivens.com
0 votes Thank Flag Link Thu Apr 15, 2010
Hi Jaime,

I am an investor. Your "prospective customer" isn't one. Sorry! And I may be brash to assume this, but he probably has no experience in real estate whatsoever. Therefore, no real investor will even consider partnering with him. His credentials? He's got excellent credit ... that's hardly enough for me to even want to talk with him for 5 minutes.

He needs to get together some capital. If he can't sell some stocks/bonds/mutual funds and come up with a down-payment, then he's wasting your time.
0 votes Thank Flag Link Fri Dec 18, 2009
That's not an investor. That's a guy who's looking for an investor to partner with.
Investors, by definition, invest.
0 votes Thank Flag Link Fri Dec 18, 2009
I have been recomending a private lender and he does seem willing to pursue that avenue. He already has a residenc that he does not want to sell, and although we have been successful in negotiating seller financing 20% th banks will not work with it. Thanks for the info, i will check it out!
0 votes Thank Flag Link Fri Dec 18, 2009
yeah that's pretty much what I thought. I have found one bank that will loan with 10% down...makes you wish for the good ole days. thanks for all your input!
0 votes Thank Flag Link Fri Dec 18, 2009
Al may be dead on here. Private Banks may choose to make a different decision with their portfolio products, but this is usually to attract clients with no problems producing a down payment (and significant deposits). It would seem like a family member or friend is more likely.

Has this person already exhausted this avenue of contacts?
0 votes Thank Flag Link Fri Dec 18, 2009
I tend to agree with Al. I'm not aware of any local lenders who are willing to work with an investor for less than 20% down (and often, they want even more than that). Your investor likely needs to find another source for his down payment or wait until he has a chance to save some - including a cushion beyond the dollar amount of the down payment.

Investing is not for the faint of heart or short of cash.
0 votes Thank Flag Link Fri Dec 18, 2009
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